Bitcoin is up a lot since the election. But you know what? The BIG Bitcoin rally hasn’t even started yet. I’m talking about the coming rally powered by massive amounts of buying by governments, big banks, and corporations as Bitcoin becomes a global currency. Grayscale Bitcoin Trust ETF (GBTC) or the 2x Bitcoin Strategy ETF (BITX) are two ways you can play the move, suggests Sean Brodrick, editor at Weiss Ratings Daily.
Before the election, Donald Trump pledged to make America "the crypto capital of the planet" and create a “strategic reserve” of Bitcoin. That’s one reason Bitcoin was the real winner of the election. But let’s look at the OTHER forces potentially powering up Bitcoin’s big move in 2025.
Force No. 1: Governments
Recently, Bitcoin reserves held by governments accounted for 2.7% of the total 21 million supply of Bitcoins. The largest holder is the US government, which has over 210,000 Bitcoins.
Germany used to be on the list of top holders, with about 50,000 Bitcoins. But the Germans sold it all in June and July. Oops!
There’s a bill already working its way through Congress — the Bitcoin Act of 2024 — which will establish a US Strategic Bitcoin Reserve. If the US does that, we can expect other governments to do the same.
Force No. 2: Corporations
Recently, public companies held a combined 305,000 Bitcoins. However, most of these are held by just a few companies.
At its shareholder meeting in December, Microsoft Corp. (MSFT), a “Magnificent Seven” tech firm, is letting investors vote on whether or not Bitcoin should be added to the corporate treasury. The results of that vote are hard to predict. But if Microsoft says “yes,” expect other big corporations to follow suit.
Force No. 3: Big Banks
Big banks are also dipping their toes into Bitcoin. Quarterly filings show that Goldman Sachs Group Inc. (GS) and Morgan Stanley (MS) bought more than $600 million in Bitcoin exchange-traded funds in the second quarter.
If the government starts building a strategic Bitcoin reserve…and ESPECIALLY if corporations start building Bitcoin assets...I’d expect big banks to build up their own Bitcoin reserves. And not just ETFs, but actual cryptocurrency.
As an investor, you can buy Bitcoin. Or you can buy one of the Bitcoin ETFs. GBTC tracks the percentage change in Bitcoin closely, while BITX is much more speculative, aiming to track twice the daily change in Bitcoin.
Since election day, Grayscale has done well, up nearly 30%. And the leveraged fund has done even better, up a whopping 65%. But remember that investments go up AND down. A 2x Bitcoin ETF would not be for the faint of heart.
Recommended Action: Buy GBTX or BITX.
